COMING SOON!

Reserve your copy now!

Also available on
CD-ROM

March 22, 2001

Carnival profit drops
Carnival Corporation (NYSE: CCL) reported net income of $128.0 million ($0.22 diluted EPS) on revenues of $1.0 billion for its first quarter ended February 28, 2001, compared to net income of $171.5 million ($0.28 diluted EPS) on revenues of $824.9 million for the same quarter in 2000.

Revenues in the first quarter actually increased 22.2 percent over the comparable quarter in 2000, primarily because of the consolidation of Costa's results of operations starting in the first quarter of 2001 and the introduction of new ships to the company's Carnival Cruise Lines and Holland America Line fleets. But earnings for the first quarter of 2001 decreased compared to 2000 primarily because the 2000 results included significantly higher net revenue yields-- largely resulting from high- priced "Millennium sailings."

Commenting on first quarter of 2001 results, Carnival Corporation Chairman and CEO Micky Arison noted that, excluding the effect of the Millennium, comparable net revenue yields were down less than one percent compared to the first quarter of 2000, demonstrating a continuing improvement over what the company had reported during the last several quarters.

"It appears our strategy of aggressively pricing our cruises for those guests booking the furthest in advance of sailing has worked, especially considering the improvement in comparable net revenue yields occurred during a period of increasing weakness in the U.S. economy," Arison said.

Also during the first quarter of 2001, the company finalized contracts for the construction of two new 105,000-ton ships for its Costa Cruises brand and also transferred Carnival Cruise Lines' 1,022-passenger Tropicale to the Costa fleet. The Costa Tropicale is currently undergoing a major refit in Italy and is expected to begin operating seven-day Mediterranean cruises in June 2001.

"The signing of these two ship construction contracts, as well as the transfer of the Tropicale to Costa's fleet, are clear indications of our ongoing efforts to increase our presence in the growing European market by building on Costa's position as the largest European-based cruise line," Arison said.

Looking to the remainder of fiscal 2001, Arison said that bookings continue to be well ahead of where they were at this time last year, although pricing remains challenging. Cumulative booking volumes for the last three quarters of 2001 are approximately 20 percent ahead of this time last year, significantly outpacing the 9 percent increase in capacity. "Even with the substantial increase in 2001 capacity, we still have less inventory remaining to sell than we did at this point last year," Arison added. "Although average pricing remains below last year at this point, the gap narrowed as we moved through the wave booking period."

Arison also noted that the company's earnings are expected to be reduced by approximately $.01 per share in the second quarter as a result of Airtours' recent announcement that they will be taking a one-off charge related to the closing of 120 travel stores in the United Kingdom. The company owns approximately 25 percent of Airtours.

Also during the second quarter, the 2,124-passenger Carnival Spirit is scheduled to enter service on April 29, 2001, and will operate a summer program of Alaska voyages. Representing the first vessel in a new class of 88,500-ton ships, the Carnival Spirit will feature a higher percentage of balconied staterooms than any other ship in the Carnival fleet and a variety of new facilities, including a wedding chapel, a two-level supper club featuring world-famous stone crabs from Joe's Stone Crab Restaurant in Miami Beach, and an outdoor wrap-around promenade.

Frontline sells two VLCCsFrontline Ltd. (NASDAQ ticker FRONY) has sold the two VLCCs, Front Tartar and Front Tarim, both built 1993 to undisclosed buyers for an en-bloc price of $104 million. The two were acquired in June 2000 at $45 million each and have traded successfully in the Tankers International Pool. The VLCCs will, by delivery to the new owners, have contributed, in addition to the gain on the sale, about $22 million to Frontline's net income in the years 2000 and 2001.

Frontline says the disposal of the vessels is part its continuous fleet renewal, which includes five newbuildings to be delivered to the company in 2001 and 2002. The sale will improve Frontline's cash position by more than $40 million.